Winning the Long Game Against Government Corruption

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Defendant Amos Carty Jr. leaves Superior Court Thursday, accompanied by his wife, Verna and Attorney Gordon Rhea. (Source photo by Judi Shimel)
Defendant Amos Carty Jr. leaves Superior Court Thursday, accompanied by his wife, Verna and Attorney Gordon Rhea. (Source photo by Judi Shimel)

At the end of a 15-year effort against wrongdoing in a local healthcare system, the Justice Department won its case against three former executives from the Schneider Regional Medical Center.

A jury in Superior Court on Thursday found defendants former chief executive Rodney Miller, ; general counsel turned chief executive Amos Carty Jr., and former chief financial officer Peter Najawicz guilty on all counts in a 44-count charging document.

The verdict came from a retrial, eight years after a jury deadlocked in the original trial. Superior Court Judge Michael Dunston declared a mistrial but the head of Justice at the time immediately declared the case would be tried again.

It took eight years for that pledge from former Attorney General Vincent Frazer to come true. Along the way there were appeals in V.I. Supreme Court, two major hurricanes, and disbanding of the Department of Justice’s White Collar Crime Division.

But justice prevailed Thursday night. Miller, Najawicz and Carty were found guilty of conspiracy under the V.I. Criminally Influenced and Corrupt Organizations racketeering statute, embezzlement, obtaining money under false pretenses, the unauthorized taking of more than $1 million, embezzlement by fiduciary and embezzlement by a certifying officer.

The defense team of Robert King, Gordon Rhea and H. Hannibal O’Bryan fought to convince jurors their clients may have taken too much money from Schneider Regional, but their actions were authorized by the hospital board. Their clients, they said, had done nothing wrong.

Among the things that prosecutors Quincy McRae, Sigrid Tejo-Sprotte and John Talud persuaded the jury was wrong were:
– The establishment of an account at the Bank of Nova Scotia, used to channel hospital funds to the three defendants;
– A write-off of a $10,000 cash advance to Carty, authorized by Miller; the creation of two lavish compensation contracts for Miller in 2005 and 2007 that were never fully executed;
– The use of letters of direction from Miller to Najawicz to disburse funds under bogus contracts. One included payment of a $45,500 advance on a housing allowance the hospital board never authorized. Another letter of direction called for payment to Miller of more than $205,000, based on a June 21, 2005 agreement that never existed. There was also a letter directing payment of more than $1.5 million under a retirement plan called the Rabbi Trust.
– Miller paid Najawicz $400 in monthly automobile allowances, again, never authorized. And earlier this week, with Carty on the witness stand, disclosure of a $160,000 loan from Miller that, like the $10,000 advance from the hospital, was never paid back.

That loan, Sprotte pointed out in cross examination, came from Miller’s personal account at the Pentagon Federal Credit Union. The same account holding hundreds of thousands of dollars in misdirected hospital funds.

The practice of paying government employees more than was called for in agreements sent to the Department of Personnel was described as payments over NOPA – the Notice of Personnel Action each employee receives. Indeed there were some witnesses for the prosecution who said salaries paid under NOPA were too low to attract and retain top notch executive talent.

Former Labor Commissioner Carmelo Rivera testified that the practice was also used at the Gov. Juan F. Luis Hospital on St. Croix. But prosecutors showed documents sent to the Division of Personnel with stipend agreements attached, letting the Department of Finance know the agreements had been formally adopted.

That was not the case at Schneider Regional.

And at a press conference held at Justice Thursday night after the verdict came in, the current Attorney General Denise George-Counts noted the secrecy surrounding the compensation process there.

It was the first time that requests for documents — executive contracts — were rejected by a sitting hospital official, in this case, Carty. Auditors from the V.I. Office of the Inspector General and the U.S. Interior Department issued subpoenas and then took Carty, Miller and Najawicz into federal court to force a handover. It was also the first time Justice officials used forfeiture rules to seize the funds and freeze assets of the defendants.

“This is a white collar case that is more complex than normal,” Counts said.

Those assets included houses, real estate, vehicles and bank accounts. After reading the verdict the judge ordered a Nov. 21 forfeiture hearing to determine how far Justice can go in retrieving those assets.

As much as $5 million may be recovered for the government, the attorney general said.

Original Source: https://stjohnsource.com/2019/11/15/winning-the-long-game-against-government-corruption/